By Frank Ahrens
Washington Post Staff Writer
Wednesday, October 1, 2003; Page E01

The music industry, criticized for its recent wave of lawsuits aimed at stopping song swapping on the Internet, agreed yesterday to contact future defendants before they are sued and give them a chance to pay a cash settlement or argue that they have been mistakenly accused of copyright infringement.

The shift, announced at a Senate hearing by Mitch Bainwol, chairman of the Recording Industry Association of America, was in response to critics who accused the music industry of casting too wide a legal net over alleged song pirates, ensnaring 12-year-olds and grandfathers alike.

"We are trying to be reasonable and fair and allow these cases the opportunity to be resolved without litigation," Bainwol said.

Bainwol nevertheless defended the industry's decision to file 261 lawsuits alleging copyright infringement. "The suits are the last resort and the end product of our campaign," he said. "They are the last thing we had in our quiver."

U.S. sales of recorded music, mostly compact discs, have dropped 31 percent drop over the past three years, the RIAA says. It blames people who trade songs on the Internet.

The RIAA has advertising and education campaigns to teach song-swappers about copyright law. It also is suing those it characterizes as "egregious offenders," mostly people with at least 1,000 songs on their computer hard drives that can be downloaded by others using peer-to-peer (P2P) file-sharing software such as Kazaa, Grokster and Morpheus.

The lawsuits have been criticized by civil liberties groups, which say the RIAA's ability to use subpoenas to learn the names of traders is unconstitutional. Some members of Congress also have expressed concern. Sen. Norm Coleman (R-Minn.), who called yesterday's hearing of the Senate Permanent Subcommittee on Investigations, said in an interview last week that he hoped to find a way to protect copyrighted songs without suing consumers.

The Digital Millennium Copyright Act of 1998 gives copyright holders the right to subpoena Internet service providers for the names and addresses of people suspected of illegally trading song files. Bainwol said the RIAA subpoenas force the Internet service providers to give up only "the same information that some of the ISPs sell to their marketing partners."

Yesterday's hearing included celebrity witnesses -- rappers LL Cool J and Chuck D, who are on opposite sides of the song-sharing debate and RIAA suits.

"A reporter asked me if I wanted to sue my fans," said LL Cool J, whose rap name stands for "Ladies Love Cool James" and who was referred to as "Mr. Cool J" by Coleman. "I told him, 'Do you write for your paper for free?' "

Chuck D, founding member of Public Enemy, an influential rap group, was one of the first musicians to support peer-to-peer file-sharing. His 1999 "There's A Poison Goin' On" was the first full-length album by a major artist made available for download.

"P2P to me means 'power to the people,' " Chuck D said. "The fans got hold of the technology before the industry did."

The hearing included a sharp exchange between Sen. Carl M. Levin (D-Mich.) and Alan Morris, executive vice president of Sharman Networks Ltd., Kazaa's parent company.

Kazaa is the most popular Internet file-sharing software and the bane of the music industry, which says Kazaa is the main enabler of song piracy and that it has knowingly built a business on violating copyrighted material. The company is incorporated in Australia and Vanuatu, a group of South Pacific islands that advertises itself as a tax haven. ("Just like Delaware," Morris said.) Levin pointed out that the island nation had been on a State Department list for money-laundering concerns and that Kazaa's refusal to name its owners made the company look suspicious.

Levin read from Kazaa's Web site, which says the service will revoke its customers' use of the software if it is used to violate copyright. But Morris acknowledged that the company does not know how its customers use the service.

"It's an honor agreement," Morris said.

"But it's not enforceable," Levin said.

"It's not enforceable," Morris conceded.

"Would you enforce it if you could?" Levin persisted.

"If a court of due competence stated there had been an infringement," Morris said, "we would certainly look at it."

After the hearing, Levin said of Kazaa: "I think they must know that most of their downloads are violations of copyright. They are highly secretive and highly evasive."

Yesterday's hearing also featured look at what it's like to be sued.

Lorraine Sullivan said she found out she was being sued when she played her home voice mail on Sept. 9 and it contained messages from four reporters, asking her for reaction.

She called the RIAA and was referred to Patricia Benson, a lawyer for Los Angeles's Mitchell Silberberg & Knupp LLP, one of the RIAA's outside law firms. Sullivan testified that Benson told her it would probably cost between $3,000 and $4,000 to settle the suit, and that "nobody likes having to be the heavy."

Sullivan told Benson that she had $1,500 in her savings account and was a student with a part-time job. Sullivan said the lawyer asked her if she could get the money from her parents. No, Sullivan, replied. Anyone else? No, Sullivan said.

Benson finally asked: Do you have credit cards? Yes, Sullivan said, but they're almost maxed out. Benson said she would ask the RIAA to accept a lesser payment. Two days later, Sullivan said she agreed to settle for $2,500.

"I won't be buying any more" CDs, she testified.